Profits for the quarter ended May 30 came in at $22.1 million or 16 cents per share, well below the first quarter of 2007, when the company posted $33.6 million in profits, or 23 cents a share. Analysts had expected earnings of 22 cents per share.

Sales for the first quarter were $815.7 million, nearly flat at 0.9 percent over last year, when sales were $808.5 million. The pace beat analysts' forecast of $812 million.

On the plus side, the weakened dollar helped Steelcase to the tune of $30.6 million. But on the downside, raw materials costs are hurting manufacturers across the board, and Steelcase is no exception.

"Global inflationary pressures have accelerated in recent months, particularly in the areas of steel and fuel-related commodities," said David Sylvester, chief financial officer. "While price adjustments are being implemented to address the initial wave of inflation, the realization of benefits will take some time, plus inflation continues to escalate."

The industry forecast for 2008 predicts U.S. production to drop 6.8 percent. That outlook by the Business and Institutional Furniture Manufacturers Association doesn't get much brighter for 2009, when production is forecast to take another 6.3 percent hit.

For its current quarter, Steelcase expects sales to grow 3 to 7 percent over the previous year's result of $825.2 million. Earnings per share are forecast in the range of 15 to 20 cents, including a $7 million restructuring charge and $15 million to $20 million for the rising costs of raw materials

Factory closings and layoffs cost $4.7 million in the first quarter, more than four times the cost a year ago. The cuts announced this spring include 250 white-collar jobs from its Grand Rapids headquarters.

The company repurchased 3.8 million shares in the first quarter at a cost of $46.3 million. That leaves $228 million in the budget for future stock buybacks.

Steelcase is scheduled for an 11 a.m. conference call with analysts, to be web cast at steelcase.com.